COURT FILE NO.

: 2811 999 DATE: December 21, 2011

ONTARIO COURT OF JUSTICE (Central East Region)

BETWEEN: DOUG DICKERSON Jody E. Johnson, Counsel for the Respondent

COMPLIANCE AUDIT COMMITTEE OF THE CITY OF PICKERING

E. Marshall Green, counsel for the Appellant

HEARD: November 8, 2011

DECISION ON APPEAL
BELLEFONTAINE. J:

[1] This is my decision on the appeal brought on behalf of Mr. Doug Dickerson from a decision of the Compliance Audit Committee of the City of Pickering dated the 18th day of May 2011. In their decision, the committee granted the applications brought by three electors David Steele, Ian Cummings and Jolanta Duszak requesting a compliance audit of Mr. Dickerson's election campaign finances, pursuant to the Municipal Elections Act (" Act").

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[2] The grounds submitted by the applicants in support of their request for a compliance audit included:

1.

That Mr. Dickerson's Form 4 Financial Statement-Auditors Report, filed by him and declared by him to be correct, shows spending of $33,331, well above the spending limit of $19,154 issued by the city clerk.

2.

The Form "4" Report did not disclose as required any inventory of campaign goods and materials, specifically signs from a previous campaign which was inconsistent with the large number of signs used by Mr. Dickerson during the campaign.

3.

Post-election day expenses for honorariums and voting day party of

$16,094 were excessive and questionable.

[3] Mr. Dickerson submits no reasonable ground existed to support the .committee's decision to order an audit. On the basis of supplemental information provided to the committee and before me by way of sworn affidavit, Mr. Dickerson submits the totality of the evidence establishes:

1.

The expense overage is a result of an incorrect interpretation by his accountant of the categorization of post-voting day expenses, totaling
$15,050 for post voting clean up and data entry, not subject to the

spending limit as pre- voting day expenses that are covered by the spending limit. 2. Given that his actual pre-election day expenses were well under the spending limit, the oversight in not including $800.00 worth of signs

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would not establish non-compliance with the Act as he would still be below the allowable spending limit. As post- voting day expenses are not limited, no reasonable grounds could exist that a breach has occurred by virtue of these expenses. [4] Fundamental to Mr. Dickerson's position, is that the Act as recently

amended has resulted in ambiguous wording and that as it is a "penal" statute, he is entitled to the interpretation most favourable to him which he submits would support his argument that no reasonable grounds exist. While the committee did not provide reasons for its decision, it has been submitted that during the course of the proceedings the committee members felt there was an ambiguity in the Act, but that the ambiguity was an issue that should be resolved at the compliance audit stage, rather than by themselves. The appellant submits that the committee was in error in doing so and that in order to determine whether reasonable grounds existed to find that the Act had been contravened they had to come to a determination of how the Act should be interpreted. [5] The legislative framework governing this appeal has been outlined by

Justice McKerlie in Fuhr v. Perth South (Township) 2011 O,J. No. 4251 para 2-7: Legislative Framework 2 The Municipal Elections Act applies to "an election to an office on the council of a local municipality". The requirements respecting "Election Campaign Finances" are specifically delineated in ss. 66 to 82.1 of the Act. 3 Pursuant to s. 69(1), a candidate shall ensure, inter alia, that:

TI (a) One or more campaign accounts are opened at a financial institution, exclusively for the purposes of the election campaign and in the name of the candidate's election campaign; (b) All contributions of money are deposited into the campaign accounts; (c) All payments for expenses, except for a nomination filing fee, are made from the campaign accounts; (d) Contributions of goods or services are valued; (e) Receipts are issued for every contribution and obtained for every expense; 4 This section also delineates a candidate's duty to keep records and to make financial filings under ss. 78 and 79.1. 5 Pursuant to s. 78, a candidate is required to file a financial statement and auditor's report, each in the prescribed form, reflecting the candidate's election campaign finances. An auditor's report is not required "if total contributions received and total expenses incurred in the election campaign up to the end of the relevant period are each equal to or less than $10,000". 6 The penalties for failing to comply with the filing requirements are set out in ss. 80(2) and 92(5). 7 The "Compliance Audit" provisions of the Municipal Elections Act are set out in ss. 81 and 81.1. The relevant provisions are as follows: 81(1) Application An elector who is entitled to vote in an election and believes on reasonable grounds that a candidate has contravened a provision of this Act relating to election campaign finances may apply for a compliance audit of the candidate's election campaign finances. 81(2) Requirements

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An application for a compliance audit shall be made to the clerk of the municipality... and it shall be in writing and shall set out the reasons for the elector's belief.

. 81(4)

Application to be forwarded to committee Within 10 days after receiving the application, the clerk of the municipality ... shall forward the application to the compliance audit committee established under section 81.1 and provide a copy of the application to the council.
. 81(5)

Decision Within 30 days after receiving the application, the committee shall consider the application and decide whether it should be granted or rejected.
81(6)

Appeal The decision of the committee may be appealed to the Ontario Court of Justice within 15 days after the decision is made and the court may make any decision the committee could have made.
81(7)

Appointment of auditor If the committee decides under subsection (5) to grant the application, it shall appoint an auditor to conduct a compliance audit of the candidate's election campaign finances.
81(9)

Duty of auditor The auditor shall promptly conduct an audit of the candidate's election campaign finances to determine whether he or she has complied with the provisions of this Act relating to election campaign finances and shall prepare a report outlining any apparent contravention by the candidate.

It . 81(13) Costs The municipality ... shall pay the auditor's costs of performing the audit. . 81(14) Power of committee The committee shall consider the report within 30 days after receiving it and may, (a) if the report concludes that the candidate appears to have contravened a provision of this Act relating to election campaign finances, commence a legal proceeding against the candidate for the apparent contravention; (b) if the report concludes that the candidate does not appear to have contravened a provision of this Act relating to election campaign finances, make a finding as to whether there were reasonable ground for the application. 81(15) Recovery of Costs If the report indicates that there was no apparent contravention and the committee finds that there were no reasonable grounds for the application, the council ... is entitled to recover the auditor's costs from the applicant. 81(17) Saving provision This section does not prevent a person from laying a charge or taking any other legal action, at any time, with respect to an alleged contravention of a provision of this Act relating to election campaign finances. [6] It should be noted that the statutory framework is substantially identical to the framework included in previous legislation which however provided for the

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municipal council to make the decision which has now in the new Act been delegated to an independent compliance audit committee. Accordingly, some decisions under the previous legislation may refer to the municipal council as opposed to the committee, but I find the principles established under the previous legislation are still valid. The relevant sections in relation to the expense issue's in the matter are the following: Expenses 67. (1) For the purposes of this Act, costs incurred for goods or services by or on behalf of a person wholly or partly for use in his or her election campaign are expenses. 1996, c. 32, Sched., s. 67 (1). Additional rules (2) Without restricting the generality of subsection (1), the following amounts are expenses: 1. The replacement value of goods retained by the person from any previous election and used in the current election. 2. The value of contributions of goods and services. 3. Audit and accounting fees. 4. Interest on loans under section 75. 5. The cost of holding fund-raising functions. 6. The cost of holding parties and making other expressions of appreciation after the close of voting. 7. Expenses relating to a recount. 8. Expenses relating to proceedings under section 83 (controverted elections).

8.1 Expenses relating to a compliance audit. 8.2 Expenses that are incurred by a candidate with a disability, are directly related to the disability, and would not have been incurred but for the election to which the expenses relate. 9. The nomination filing fee referred to in section 33. 1996, c. 32, Sched., s. 67 (2); 2009, c. 33, Sched. 21, s. 8 (28).

Expenses 67. (1) For the purposes of this Act, costs incurred for goods or services by or on behalf of a person wholly or partly for use in his or her election campaign are expenses. 1996, c. 32, Sched,, s. 67 (1). Additional rules (2) Without restricting the generality of subsection (1), the following amounts are expenses: 1. The replacement value of goods retained by the person from any previous election and used in the current election. 2. The value of contributions of goods and services. 3. Audit and accounting fees. 4. Interest on loans under section 75. 5. The cost of holding fund-raising functions. 6. The cost of holding. parties and making other expressions of appreciation after the close of voting. 7. Expenses relating to a recount.

8. Expenses relating to proceedings under section 83 (controverted elections). 8.1 Expenses relating to a compliance audit. 8.2 Expenses that are incurred by a candidate with a disability, are directly related to the disability, and would not have been incurred but for the election to which the expenses relate. 9. The nomination filing fee referred to in section 33. 1996, c. 32, Sched., s. 67 (2); 2009, c. 33, Sched. 21, s. 8 (28).

76. (1) An expense shall not be incurred by or on behalf of a person unless he or she is a candidate. 1996, c. 32, Sched., s. 76 (1). Only during election campaign period (2) An expense shall not be incurred by or on behalf of a candidate outside his or her election campaign period. 1996, c. 32, Sched., s. 76 (2). Who may incur expense (3) An expense may only be incurred by a candidate or an individual acting under the candidate's direction. 1996, c. 32, Sched., s. 76 (3). Maximum amount (4) During the period that begins on the day a candidate is nominated under section 33 and ends on voting day, his or her expenses shall not exceed an amount calculated in accordance with the prescribed formula. 1996, c. 32, Sched., s. 76 (4).

10Prescribed formula (4.1) The prescribed formula must be written so that the amount calculated under it varies based on the number of electors entitled to vote for the office for which the candidate is nominated. 2009, c. 33, Sched. 21, s. 8 (37). Exception (5) Subsection (4) does not apply in respect of expenses described in paragraphs 3 and 5 to 8:2 of subsection 67 (2). 1996, c. 32, Sched., s. 76 (5); 2009, c. 33, Sched. 21, s. 8 (38).

[7] STANDARD OF REVIEW The parties disagree on the Standard of Review for me to apply in these proceedings. Counsel for the committee submitted that as the criteria for the selection of members of the committee requires "demonstrated knowledge and understanding of municipal election campaign financing rules", the committee members can be found to have special expertise and given the specialized nature of election financing rules, their decision should be accorded deference. If so, the standard of review of "reasonableness" as set out by the Supreme Court of Canada in Dunsmuir v. New Brunswick, [2008] 1 S.C.R. 190 should apply. Under that "reasonableness" standard of review, I would not substitute my own view of the correct outcome, but rather, provided the committee's decision making process was reasonable and the decision fell within the range of defensible outcomes, I would be obligated to defer to their decision. The appellant submits that a reasonableness standard should not apply. They submit it is only appropriate to do so where there is a privative clause restricting review by an appellant court, or

-11where deference should be given to findings made within the field of specialized knowledge of an administrative decision maker or where the reasons provided disclose an analytical process which merits deference. The appellant submits that those criteria are not met in this case, that no deference should be shown to the decision of the compliance audit committee and that I should apply a "correctness" standard of review. Pursuant to Dunsrnuir v. New Brunswick, a "correctness" standard of review would require me to undertake my own analysis of the question and uphold the committee's decision if my own analysis is consistent with it and substitute my decision for that for that of the committee if I disagree with it.

[8]

I consider that the appropriate standard of review to apply in this matter

is

one of correctness. I do acknowledge that some Courts have taken a different approach and applied a reasonableness standard where the expertise of the committee members has been established and is at a level that merits according their decision deference. See Lane, J. in Lyra v. Heaps [2008] O.J. No. 4243 (Ont. C.J.).

[9]

However, while the Municipal Elections Act is a specialized area where

committee members may have expertise that would merit deference, I consider the correctness standard appropriate in this case as the qualifications of the committee in this matter as selected are not before me. I do not consider the selection criteria alone to be sufficient for me to evaluate the level of expertise of the committee members. They mayor may not have the qualifications called for and the qualifying criteria are broad enough that they are not a guarantee of expertise, particularly given the adhoc and sporadic nature of this type of application, that was before them for consideration.

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[10] I note as well that the wording of the review section which provides "...the court may make any decision the committee could have made." provides broad discretion to the appellate court and contains no privative clause restricting the Courts discretion or mandating deference being given to the committee's decision. Further, the evaluation of whether reasonable grounds exist is a common function for members of the Ontario Court of Justice, so while the Municipal Elections Act context is an uncommon one for the Court to be dealing with, the legal principles and tests to be applied are well within the expertise of the Court. While the committee members may have a background in municipal election finances that will assist them with understanding the broad context of the analysis, they have no expertise superior to the reviewing Court in the area of analyzing whether reasonable grounds exist. [11] In addition, the lack of reasons for the decision of the committee creates a significant hurdle in evaluating the reasonableness of the decision making process. Given the intermingled considerations of fact and law that underlie the committee's ruling, the lack of reasons showing the decision making process is a significant barrier to appellant review and according deference to the decision. I note further that a correctness standard has been applied by a number of courts in the Municipal Election Act context. See for example Chapman v. Hamilton (City of), [2005] O.J. No. 1943. [12] Accordingly, applying a correctness standard I will conduct my own review to deterrhine whether reasonable grounds exist to order a compliance audit and uphold the committee's decision if I agree it was correct and alternatively

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substitute my own decision to the contrary ilI consider the committee's decision to have been incorrect.

SCOPE OF REASONABLE GROUNDS

[ 13] Given the appellant's heavy reliance on supplemental materials that were not available to the elector applicants at the time of filing their applications for an audit, I consider it necessary to decide the framework for determining whether reasonable grounds exist that a candidate has contravened a provision of the Act. Is the analysis to be conducted as a review of the Electors subjective and objective belief based on the information in their applications and the Form "4" report only? Alternatively are the grounds to be evaluated from the perspective of the committee based on the supplemental information that may have been provided by the electors or the candidate at the time of its decision? Further again, am Ito conduct my own consideration of the reasonable grounds as of the appeal hearing with the supplemental affidavits and materials filed at this stage?

[14] In Chapman v. Hamilton, Justice Culver conducted his analysis as a review of the Electors belief, stating at paragraph 39: "I conclude that if the Elector (my emphasis) is found to have had reasonable grounds to believe that a candidate had contravened a provision of the Act relating to campaign finances an audit is the only remedy available". "...Council (now the committee) must consider whether the Elector has reasonable grounds to believe".... [15] Justice Culver also dealt with a request to consider evidence from the candidate on the appeal that established his bona fides and the adequacy of his

reporting in complying with the election finance law. At paragraph 54 he refused to consider this information holding:

"Counsel for the (Elector) submits that I should not allow this appeal to be turned into an audit, a proposition with which I agree... It is the duty of this court to consider the grounds for the request for compliance audit, not to become the auditor." [16] Justice Lauwers in Jackson v. Vaughan [2009] O.J. No. 1057 (Ont. Stipp. Ct.) was also of the opinion that the issue to be determined is whether the Elector had reasonable grounds as of the time the application for an audit was made:

Paragraph 51 "In the context of the M.E.A. there is minimal discretion in the council's (now committees') decision on whether to appoint an auditor under Section 81(1) and (4). If the application shows (my italics) reasonable grounds, that is the end of the matter and council must appoint an auditor." Justice Lauwers decision was upheld and his reasons approved of by the Court of Appeal at [2010] O.J. No. 588. Considering the foregoing there is in my view strong precedent for confining the issue to whether the Electors applications showed reasonable grounds to believe the Act had been contravened.

The appellant has asked that the reasonable grounds be assessed in light of his subsequently provided sworn supplementary evidence. To do so would require me to not only consider post-application materials, but also to take on the role of auditor and trial judge and determine the veracity of the appellant's facts which is not my function at this stage of the proceeding. I consider my duty to be the

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narrow one of acting as a gate keeper and determining whether credibly based reasonable grounds existed for the Elector's applications at the time they were made. This limited role to investigating and evaluating the facts is the approach that was taken by Justice Lauwers in Jackson v. Vaughan at paragraph 67 and 68:

"Similarly, In DeFrancesca et al. v. City of Vaughan (October 7, 2008), Newmarket, 07-000486 (O.C.J.), Justice H.I. Chisvin reviewed an application in which seven issues were raised concerning the campaign finances of Bernie DiVona, an elected councilor of the City of Vaughan. City Council denied the applicants' request for a compliance audit. Chisvin, J. asked himself the following question: "Does anyone raise a reasonable ground to believe that a violation has occurred?" (para. 12) He looked at only one of the issues, concerning contributions by businesses apparently located at a single address and having similar officers and directors. He found that there were reasonable grounds to believe that there had been a violation of the finance provisions of the MEA. He concluded at para. 17: "There are six other issues raised by the applicants in this factum with respect to this matter. I do not propose to review them in detail as it is not my function to determine the ultimate veracity of each and every one of these matters. As I've said, it is my function, like that of council's, to determine only if there are reasonable grounds for the electorate to believe that there has been a violation of the campaign finance provisions of the Act... I find that there are good reasons for this approach. In terms of the statutory structure, the role of the Ontario Court judge in an appeal under s. 81(3.3) of the Act is limited. The judge's responsibility is to deal with the issue of reasonable grounds. It is the responsibility of other actors in the statutory framework, not the Ontario Court judge at this stage, to conduct the audit, evaluate the results, authorize a prosecution, carry it out and try the case."

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Accordingly in my opinion, my review of the committee's decision should be confined to the information available to the Electors.

REASONABLE GROUNDS

[17] Reviewing the applications for a compliance audit in this matter, I am satisfied there are credibly based reasonable grounds to support the request for an audit.

[18] Mr. Dickerson's filed Form 4 Report was certified by his auditors to be correct and declared by Mr. Dickerson to be correct and shows a significant spending amount over the spending limit set by the municipal clerk which is sufficient to provide the reasonable grounds. Mr. Dickerson may ultimately succeed with his argument that his auditor incorrectly classified post- voting day expenses and that he was statutorily coerced to declare that classification to be true even though he disagreed with it. That position assumes that his auditor accepted the expenses to be valid post- voting day expenses. The auditors' reasons for the classification are not known to the electors who have applied for the audit. It may hypothetical be that an audit will show the expenses claimed to not be post- voting day expenses at all, but pre- voting day expenses as Mr. Dickerson's auditor has classified them. Determining the true state of affairs is the function of the auditor and ultimately the trial court who will make the ultimate decision on the facts and the law as they find it. [ 19] It has been argued by the appellant that a new audit is unnecessary in relation to the over expenditure grounds because it will simply result in a repeat of

-17the previous auditors work and that myself as an appeal judge can decide what the appropriate classification of the different expenses should be and eliminate the need for an audit on this ground. In my view this argument misperceives the proper scope of the compliance audit. The Municipal Elections Act establishes a self-reporting and self-monitoring system while providing public transparency of election finances and expenses. Provided there is a single reasonable ground to support the compliance audit, I consider a wide ranging audit and report to be required to meet the needs of public transparency. As noted by Justice Lauers at paragraph 68 of Jackson... "the identification of a problem may suggest that there might be more awaiting discovery. For example, the failure to issue a campaign receipt may be related to an unauthorized expenditure; this is grist for the auditors mill and is well beyond the purview of an Ontario Court Judge on an appeal under Section 81(3.3)." He also articulated this point at paragraphs 64 and 65: "The Applicant argued that the compliance audit must relate only to the matters in the complaint that are found by the judge hearing the s. 81(3.3) appeal to have reasonable grounds. I disagree, I find that s. 81 (1) is a threshold requirement only. Once it is plain to a municipal council that there are reasonable grounds for the belief "that a candidate has contravened a provision of this Act relating to election campaign finances" under s. 81(1) then the result is a "a compliance audit of the candidate's election campaign finances"; in order words, the audit is comprehensive and is not restricted to the matters referred to in the complaint. The trigger can be a single contravention, although in this case the applications for a compliance audit identified numerous possible contraventions." [20] The powers of an auditor under Section 81 (12) confirms the broad scope of the audit. For the purposes of the audit, the auditor is entitled to have access to all

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relevant books, papers, documents or things and has the powers of a commission under the Public Inquiries Act, which applies to the audit as if it were an inquiry under that Act. The audit also clearly includes not simply the audit, but also a report outlining any apparent contravention by the candidate. [21] Accordingly, it would in my view be contrary to the purposes of the Act to have me simply rely on Mr. Dickerson's reply information and make a decision as to the categorization of the expenses as he calculates them and potentially circumvent the fulsome audit and report contemplated by the Act.

[22] A similar analysis applies to the unreported inventory of election signs reused from the previous election which was required to be reported and admittedly was not. The absence of a declaration of sign inventory by a repeat candidate given the electors statement that a large number of signs were displayed by Mr. Dickerson during the campaign, is sufficient reasonable grounds to support the audit request. It would be reasonable to assume that a repeat candidate would have maintained some signs from the previous election for re-use in future campaigns which is exemplified by the specific provisions in the Form 4 report for this item. I do not consider it my role at this stage to accept Mr. Dickerson's statements as to the number of signs in pre-existing inventory or the value of them or whether that value would be low enough to keep pre- voting day expenses below the allowable limit. That is a function that should be left to the auditor in the context of a complete audit.

[23] The final ground raised, questioning whether the post-election party and honorariums were excessive effectively question whether they were bona fide. Hypothetically investigation may show the expenses to be personal rather than an

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event recognizing the efforts of supporters or not to have been incurred at all. Also hypothetically, post-election honorariums may have been promised and calculated in a way that they amount to salaries and benefits/honorarium/professional fees that are properly included in pre-election expenses which would be subject to the spending limit. Post election expenses may be considered critically in light of the requirement that any surplus monies from donations are required to be paid to the municipal clerk and following the period in which they are held in trust for the benefit of the candidate are forfeited to the municipality. This raises an incentive for candidates, and creates the potential, that candidates would use the funds for purposes not related to the election to avoid having the money forfeited to the municipality. The transparency objective of the act supports the reasonableness of a review of post-election day expenses that are not subject to the spending limit to ensure the legitimacy of the post-election expenses so that those who made donations can ensure their donations were spent on election related costs.

[24] As an aside, I would note that post-election expenses may also disclose expenditures that result in an inventory of goods and materials available for future campaigns that are obligated to be reported in the Form 4 Report.

[25] I am of the view that this final ground as well, given the significant expenditure beyond the expenditures reported by the other candidates, was a reasonable ground for supporting the order for an audit.

[26] None of the foregoing analysis with respect to whether or not reasonable grounds existed requires a determination of the main ground of appeal relied upon by the appellant being the ambiguity created in the legislation by the absence of a

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clear policy or direction for determining, what is an expense subject to the spending limit, and what is not. Given the limited role for fact finding when assessing whether reasonable grounds exist the ambiguity does not arise. For the purpose of assessing this ground it is sufficient that Mr. Dickerson's auditor has found his spending to be above the allowable limit. The ambiguity would not affect the other grounds for ordering the audit. Accordingly, I do not consider the Committee to have been in error by deferring consideration of the ambiguity to the auditor. Considering all of the materials and arguments in this matter, I am satisfied the Compliance Audit Committee of the City of Pickering made the correct decision in ordering the compliance audit and the appeal from its decision is dismissed. [27] The Appellant has asked that I give direction to the auditor on how to interpret the Act to determine what are expenses subject to the spending limit and what are not. Courts historically have been reluctant to make rulings on an anticipatory basis. Interpretations of the law tend to be very context sensitive and a broader factual basis tends to highlight the legal implications of different interpretations and accordingly assists in the interpretation of the law. It may well be that during the course of a forensic audit, using the public inquiries power granted to the auditor, expert evidence with respect to accounting and municipal election finances may provide further insight than what is before me at this time. As well, as any statements that I make with respect to the interpretation of the Act
is obiter dicta, it may have little precedential value for future courts dealing with

the issue. Notwithstanding those cautions, I feel it is appropriate to indicate my opinion. There will be a large number of candidates who will be required to fill out Form 4 in future elections and any clarity on the legislation may be a benefit to

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them. Notwithstanding the many candidates running for municipal office across the province, the Act appears to have resulted in very few appeals and even fewer trials before the Provincial Courts to present occasions for the Court to provide a legal interpretation of the various sections of the Act and provide guidance to candidates and their advisors I have had the benefit of experienced counsel making submissions on this matter with full factums and although the factual basis before me is not as fullsome as will be available to the auditor preparing the compliance audit and report, I'm satisfied I have sufficient information to interpret the sections. I would make the following observations:

By creating two separate time periods in Sections 76(1) and 76(4), the Act creates a distinction between pre voting day (including voting day) expenses and post voting day expenses. Auditors should be willing to designate expenses as one or the other. Post voting day expenses, not "incurred" in the period to the end of voting day, are not limited by the Act either by the dollar amount or the nature of them. Specifically, the statutorily deemed post voting day expenses listed in Section 76(5) do not define or limit the nature of post voting day expenses. I consider the 2010 Municipal Election Guide to be in error in stating (except for Section 76(5) expenses)..."all expenses count towards a candidates spending limit." While a cautious candidate would follow that approach they are not bound by law to do so. In the event the Legislature wants all expenses, other than specified ones, to be covered by the spending limit an amendment to the Act will be required.

2.

I interpret the term "expenses" in Section 76(4) that are subject to the

spending limit to be defined by Section 67(1) which provides "for the purpose of

-22this Act, costs incurred for goods or services by or on behalf of the person wholly or partly for use in his or her election campaign are expenses." The use of the term "incurred" requires that for the purposes of the Section 76(4) spending limits, an analysis be conducted as to whether an expense paid after voting day was wholly or partly for use in the election campaign up to the end of voting day even if actual payment is made after voting day. This flows from the ordinary meaning of the word "incurred", being: "to make oneself subject to; to bring on oneself an expense or obligation." See, The Shorter Oxford English Dictionary. The definition supports a requirement that an expense be applied to the period during which the obligation to pay it first arises rather than simply looking at when it is paid.

3.

A purposive interpretation of Section 67 would additionally require that post

voting day expenses that are integral to the pre voting day election campaign be considered expenses that are incurred for the period ending on voting day and accordingly subject to the spending limit unless they fall within the Section 76 (5) exceptions. On the basis that one of the purposes of the Act is to ensure that all candidates are on an equal footing and that the costs of a campaign are to be kept within reasonable limits, necessary wrap up expenses following voting day should be part of the expenses subject to the spending limit. Accordingly items such as the termination of lease costs, removal of telephones and other electronic equipment and the removal of signs which are a natural by-product of the campaign should be considered to be costs incurred for the election campaign that are subject to the spending limit. I do not accept the narrower interpretation argued by the appellant that only expenses incurred to get the candidate elected should be considered. On this narrow view the cost of erecting a sign would be an expense subject to the spending limit, but the cost of taking it down is not. In my view such

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a fine distinction ignores a purposive interpretation of Section 67(1) that speaks of the "costs incurred for goods or services... for use in his or her election campaign" that should be read into Section 76(4). I consider the costs of removing the signs to be one that is incurred at the time they are erected. To permit the deferral of significant necessary expenses associated with the pre-voting day campaign until the post-voting day period would risk undermining the spending limit and defeating the purpose of it. The narrow approach of confining pre-voting day expenses to those directly related to "getting votes" or having the candidate elected is also inconsistent with the broad wording of Section 67(1) and the broad wording of Section 76(4) which would capture most pre-vote and post-vote expenses in the spending limit as they will have been paid for or incurred in the pre-vote period. 4. The issue of the post election data analysis and related data inputting was

not argued at a level that I am in a position to comment on it. On the assumption that it is a post voting day expense and no cost was incurred for it before voting day, it would not appear to be a necessary or integral part of the pre-voting day election campaign expenses and should not be subject to the spending limit. It may well, on consideration by the auditor, be found to be an expense that should be considered as an "other" to be listed in the list of expenses, not subject to the spending limit in Form 4. If it is considered an allowable post voting day expense, but still a cost incurred for use in the election campaign as more broadly defined in Sections 67 and 68, consideration may have to be given as to whether or not the reports flowing from it are goods to be listed in the "Schedule for Inventory of Campaign Goods and Materials at the End of Campaign".

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It will be noted that I have taken a purposive interpretation to the expense provisions and rules. The appellant has argued that the proper interpretation rule to apply is that ambiguities in a penal provision should be interpreted in a manner most favourable to the defendant. I consider that rule of interpretation to only apply if there is an ambiguity after the words of the Act are read in their entire context, in their ordinary sense, harmoniously with the scheme of the Act, the object of the Act, and the intention of the Legislature. See Bell Expressview [2002] S.C.J. No.43, where Iacobucci J. held a purposive approach should be taken before resorting to the strict construction of penal statues rule. I consider the statute to present a coherent framework which given a purposive interpretation leaves no ambiguity. As indicated previously, the appeal in this matter is dismissed. A compliance audit is ordered pursuant to Section 81 of the Municipal Elections Act with regard to the campaign finances of Mr. Doug Dickerson for the 2010 Municipal election. The matter is remitted to the Compliance Audit Committee for the appointment of an auditor, who shall conduct the audit and prepare the report required by Section 81 of the Act. There has been a request for costs on a partial indemnity basis. Given the significant role that costs play in the Municipal Election Act finances regime to discourage frivolous or unnecessary requests for an audit, I view costs to be a proper mechanism to discourage one side or the other from unnecessarily appealing decisions of the Compliance Audit Committee. Accordingly, I award the respondent's their costs in this matter. If the parties cannot agree on costs, I am prepared to receive written submissions by February 21, 2012.

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The date of this decision for appeal and other purposes shall be December 21, 2011. I am forwarding it by mail to the parties in advance to avoid the expense of having them attend on the listed date for judgment. No one need attend on December 21, 2011.

P.L. Bellefontaine, Justice